Studying Abroad is Now Easier with GyanDhan’s Education Loan Without Collateral for Abroad Studies.
Many students aspire to get into their dream universities abroad for their higher studies. However, due to the complicated process of getting an education loan for abroad, many among them settle for a job in India or choose an Indian Institute for further studies.
Why should students kill their aspirations because of financial shortage? To help students get admissions in their choice of university, GyanDhan has developed a novel strategy to offer education loans at low-interest rates to all aspiring students. We work with all lenders in the market, such as SBI, Bank of Baroda, Axis Bank, ICICI, Incred, and Avanse - to bring the best-suited education loans to you.
In this blog, we will try to provide a general idea about educational loans, with a focus on unsecured education loans or education loan for abroad studies without collateral

Why Apply for an Education Loan?

The overall cost that will be incurred including the fees for studying abroad depends a lot on the country you plan to choose. For example, an MS in the USA will typically cost you around the US $65,000- $70,000. Considering the high exchange value and the growing cost of higher education, a considerable number of Indian students need to apply for education loans, especially from mid-income families. Apart from this, it is a smarter financial move to take an education loan rather than spend your savings.

Why is Collateral Usually Required for an Education Loan?

A number of public sector banks, private banking institutions, and financial corporations offer different kind of education loans at varied rates of interest. Most of them offer loans up to 7.5 lakhs without the need for arranging any collateral by the borrower.
However, for a credit limit crossing 7.5 lakhs, most organizations ask for a deposit of any asset as collateral. The collateral is asked to handle the NPAs i.e. the Non-Performing Assets in case the borrower defaults on the loan payments.
Collaterals are a risky business, and many get uncomfortable at the thought of taking a loan against their personal assets as security.

But worry not, GyanDhan is India’s leading education loan startup. We make it possible to get study abroad education loan with or without collateral from Indian banks and non-banking financial institutions!

What Are The Existing Education Loans To Study Abroad Offered By Banks

Our motto is to make higher education accessible to maximum numbers, so we have included all kinds of players from the public to private.
The existing Banking and Non-Banking financial organizations offer education loans at differing interest rates. A couple of examples:

Education Loan from Bank of Baroda, one of the largest banking institutions in our country, offers education loans of up to INR 80 lakh for the listed institutes and 60 lakh for the unlisted ones. The interest rates start from 9.90% for the listed institutes and 10.65% for the unlisted ones for all loans above the INR 4 lakhs ceiling. Note that these interest rates are floating, and may change with time The bank also offers a concession of 0.50% for girl students planning to study abroad irrespective of the institute listing.

Axis bank, a prominent private bank is offering education loans up to INR 75 lakhs for studying abroad. One of the key features of the bank is that it offers education loan for abroad studies without collateral up to 40 lakhs. Like any other lending institutions, the interest rates vary from 11% to 13% depending upon the applicant’s profile.

InCred is an NBFC that offers education loans with collateral up to 1 Crore for abroad studies and the amount without collateral is 40 lakh (can be increased with exception). The interest rates broadly range from 11.75% to 16% depending upon the loan amount.

In recent years, many Non-Banking Financial Corporations and private lenders have emerged to provide loans without collateral.

How to Get an Education Loan without Collateral

Private banking entities such as Axis and ICICI Bank and Non-bank finance companies, such as InCred Finance and Avanse, offer education loans without collateral but their application procedure and approval policy are unclear.
Now, this is where GyanDhan comes into the picture. It facilitates sanction of education loans without collateral at low-interest rates (starting at 11%, as on the date of this blog) - in a transparent and quick application process. We pre-assess your profile to determine which lender’s product fits you the best and then recommend that product to you. What’s more – GyanDhan doesn’t charge any processing fee!

Also, if students can afford to keep their assets as collateral, then interest rates for loans availed from public banks through GyanDhan start from 9.90% for boys and 9.40% for girls (these rates are as on the date of publishing this blog and may change with time).

What is the Procedure to avail Student Loans from Foreign Institutions

You can also avail the International Student Loans offered to international students in abroad Universities. However, here the borrower needs to have a co-signer as a guarantor who should be a permanent citizen of the respective country with a good credit record. The Co-signer is obliged to repay the loan in the event of the borrower defaulting; moreover, it is difficult to find a co-Signer in a foreign country.
Although, recently, a few foreign lending organizations have started offering student loans without requiring co-signers. However the processing fee is typically quite high (2.5%-5%), and the $-based interest rates are high as well (10%-12% typically). For example, if you assume that 10% in USD is a low-interest rate – think again! 10% in USD is comparable to 15% in INR due to some factors.

What Should You Choose?

Taking a loan is a liability in itself, and therefore students need a hassle-free process, with economically optimal terms such as low-interest rate, low fee, etc..
help you in availing the best deal on education loans without collateral for abroad studies, so that you can start realizing your dreams.

About author

Ankit Mehra
Ankit is the co-founder and CEO of GyanDhan. An IITK / IESE alum who previously worked at Capital One / Credit Suisse, his aim is to equalize and expand access to higher education. His interests include playing football (soccer), and basketball, trading/investing the limited money that he still has, and discussions on economics / politics.